Africans living in the UK are the largest sources of remittances back to the continent. In 2015, they sent back an estimated £4.1 billion ($6.5 billion).
But guess what? Of this whopping amount, 90% of all the transfers were done in cash. Yes, cash.
Despite the availability of digital transfer options, the majority of remitters still prefer cash-to-cash payments, where both the sender and receiver visit a physical location to deposit or collect cash.
These cash-to-cash transfers have raised the costs of sending money to friends and family in Africa and over a million people are paying on average £80 more than they should per year.
If these senders used alternative digital services, they could easily have saved over a £100 million a year in total fees to agents.
This “stickiness of cash” is a factor contributing to making Africa the most expensive region to send money to—averaging 9.8% of the amount sent.
The costs of sending money from the UK is especially prohibitive for countries like Rwanda, Zambia, and Eritrea, where competition is among service providers is low or nonexistent, and for South Sudan, where poor infrastructure and the scarcity of operators makes sending money relatively expensive.
Read the full article at: Quartz Africa